Wednesday, September 30, 2015

The Internet edge network is primarily located in Tier 1 cities. These municipalities are defined as Tier 1 because they contain Internet Exchanges (IXs). IXs or peering points are physical points in the network where carriers and some content providers interconnect their networks. Originally, there were only a handful of these Tier 1 exchanges in the US. Now, Discerning Analytics (DA) would consider the following metropolitan areas Tier 1 markets: Atlanta, Boston, New York City, Washington DC/Ashburn, Miami, Chicago, Dallas, Denver, Los Angeles, Palo Alto/San Jose and Seattle. In addition, Phoenix, Houston and Las Vegas may soon be considered Tier 1. Just a review of the following table will show you why. It lists what DA currently considers Tier 2 markets. Some, like Phoenix, Houston and Las Vegas, already have sizeable IXs, while others do not. Those that have smaller or no IX would benefit from an interconnection service as well as an Edge Data Center®.

A Cross-section of Tier 2 Cities with Local Content Data Centers and Internet Exchanges

This list is not meant to be exhaustive, but to demonstrate a few co-location data center companies that are addressing the content delivery issue in smaller municipalities. EdgeConneX leads the way. In fact, Edge Data Centers is EdgeConneX’s registered trademark. However, others like Cologix and 365 Data Centers are beginning to realize the business potential of providing content delivery nearer to the end users – or as some in the industry would say “closer to the eyeballs.” In addition to those that we mentioned above, some of these other cities, including Jacksonville, Austin, Buffalo/Niagara, Portland, Tampa, Detroit, Kansas City, Minneapolis, Richmond and even Omaha and Reno have actually formed new formal Internet Exchanges to help facilitate improved interconnection and content delivery. But, that really is not enough. While local peering points will facilitate local traffic, only edge data centers will alleviate overburdened content delivery network connections to Tier 1 points – where the content for many applications reside.

It is important to distinguish the difference between a Tier 2 edge data center and a co-location data center in a Tier 2 market. The main difference is that the Tier 2 edge data center truly moves the edge of the network closer to the end user – so the content is housed within this data center as opposed to being delivered from the “nearest” Tier 1 city. For example, EdgeConneX has an edge data center in Salt Lake City because its clients/tenants are delivering content directly from it to the consumers in the area. So far Comcast and Level 3 are the only content providers, but we expect to see many more based on relationships they have in other cities – like having Google in their Phoenix data center. In contrast, ViaWest has several co-location facilities in Salt Lake City, but no product for interconnection of content providers outside the greater Salt Lake City Area. That content comes from Denver, Chicago or Minneapolis where ViaWest connects to an Internet Exchange or content delivery network (CDN). There is an obvious advantage to having the content closer to you – in this instance; any of your video-on-demand programs from Comcast would load faster with less distortion because there is a much shorter distance that the signal has to travel.

CyrusOne is tackling the content delivery issues a little differently. They have launched a product known as National IX. Its marketing material claims its National IX “can be more resilient and deliver a better connection to your clients when connected to CyrusOne’s top-tier, highly redundant facilities using National IX.” This service really just connects all of CyrusOne’s data centers, which means if Netflix is one of its tenants, other tenants could connect to them. It still does not deliver data from the immediate area – it is not an edge data center. While Cologix and 365 Data Centers have content providers in their data centers, they do not have a concerted effort (at least that we can tell) to do this in all of their data centers.

It would be nice to be able to watch a Netflix movie without it freezing up or quitting all together because it has to travel on a shared network for more than 300 miles to get to the television. For many end users today, on-demand viewing can be very frustrating. All Tier 2 and Tier 3 markets would benefit from having true edge data centers. Hopefully, we will be seeing more co-location data center suppliers rising to the challenge of delivering them as well as more content providers taking space in them.